Life insurance is not something people think about when they are in their twenties. This is your time to see the world, do the things you love, and check some boxes off your bucket list.
However, enjoying your twenties does not mean you should completely forget your other “adult” responsibilities. This is also the time to set yourself up for the future.
One of the best ways to prepare for marriage, having children, home ownership, or starting a business is to get life insurance. Here are some other reasons why you should get life insurance while you are still young:
You will pay a lower premium
When you are young and healthy, life insurance is a lot less expensive than it will be when you are older. Most life insurance companies charge people in their early forties at least twice as much people in their late twenties. Even If you’re in excellent health, you can expect your rates to increase 11-15% each year after the age of 40.
If you happen to be diagnosed with a serious health condition later in life, qualifying for an affordable policy could be a challenge. Buying your life insurance now allows you to lock in your rates, so you will pay the same amount throughout your entire coverage period.
You can support others
Your parents might rely on you for financial assistance each month, or you could be the primary breadwinner for your family. You might even have a significant other that relies on you for an income while they finish school or get their career started.
In any of these cases, it is important to create a financial safety net for your loved ones. Life insurance can provide invaluable financial support to those who rely on you. Imagine if you were to become terminally ill or die, the ones you leave behind would be in very difficult situation.
You have incurred loans
If you’re like most people in their twenties, you probably have outstanding student loans that a family-member co-signed for. In addition to your student loans, you may also have a car note, credit card debt, or a mortgage if you own a home. If you’re a business owner or an entrepreneur, you might even have an SBA loan.
While you know that you make enough income to pay the loans off, what would happen if you died unexpectedly? Would your parents or surviving family members be forced to shoulder the financial burden, or would they lose all the assets that you’ve worked so hard to accumulate for them?
You save more money
Even if you remain in good health for the rest of your life, buying your life insurance policy when you are younger will save you money, especially if you are considering permanent coverage. Some companies even offer affordable “lifetime” coverage where you lock in your rates until age 100, 105, 110, 120, or later.
If you are considering term life insurance, make sure your policy offers a conversion option for lifetime coverage. This way, if you still need life insurance as your term is ending in 20 or 30 years, you will be able to continue your policy for the rest of your life without having to requalify.
Start looking at term life insurance quotes now, so you’ll have an idea of how inexpensive life insurance can be. While you might be tempted to use your money for other things, the more you understand the details, the more you will realize that life insurance is worth the cost.